Former Secretary of the Treasure Lawrence Summers has officially withdrawn his name from contention for the chairmanship of the Federal Reserve, the Wall Street Journal reports. Summers called President Barack Obama on Sunday to inform him of his withdrawal, and confirmed the decision in a follow-up letter. The most likely candidate is now Fed Vice Chair Janet L. Yellen, who would be the first woman in the post.
Summers, who also served as chair of President Obama’s National Economic Council early in his first term, and who was once president of Harvard University, is widely respected as an economic scholar but is also very controversial. Conservatives opposed him for his role in crafting the 2009 stimulus, which spent nearly a trillion dollars but produced little in jobs or economic growth and merely added to the deficit and debt.
On the left, opposition to Summers stemmed from his role in deregulating financial markets during the Clinton administration, which some suggest helped lead to the 2008 financial crisis. Sen. Jon Tester (D-MT), who sits on the Senate Banking Committee said late last week that he would oppose Summers for that reason. A survey of monetary economists also found that most preferred Yellen, the Journal reported.
In addition, Summers continues to be dogged by controversy surrounding remarks he made during his tenure as Harvard’s president, when he speculated in a private meeting that one reason (among others) for women’s lower achievement in the sciences relative to men might be biological. The ensuing controversy saw him pushed to resign, though he enjoyed the support of Harvard students and most graduate faculties.
Summers had taken the nomination process seriously enough to suspend his work as a consultant for Citigroup recently. Had he been confirmed as Chairman of the Board of Governors of the Federal Reserve, he would have governed the nation’s monetary policy with a great degree of political independence, serving a four-year term that would have stretched into the first term of whoever will be the 45th president.
President Obama is known to have favored Summers over Yellen, in spite of opposition from his own party. Whether that is because of Summers’s willingness to embrace stimulative policies, or because Summers had adapted to a collegial culture in a White House sometimes criticized for its lack of female leadership, it was soon clear that Summers’s path to confirmation would be rocky. Summers remains a professor at Harvard.